Increased regulation, shifting demographics, advances in technology and climate change are likely to be the biggest factors impacting the re/insurance industry going forward.That is the view of Clement Booth, member of the board of management at Allianz, who was the keynote speaker on the second day of the Insurance Day Summit held at the Fairmont Hamilton Princess yesterday.Mr Booth said that the market had withstood the financial crisis and a series of unprecedented catastrophes during the first quarter of this year, but now faced a whole new set of challenges and opportunities from Solvency II and a change in the global population between ages and peoples to a more digitally connected world and the effects of global warming.Reflecting that the re/insurance sector had been characterised by constant change, more so than ever before, particularly in light of the Japanese earthquake and tsunami in March and the second earthquake in New Zealand earlier this week.“We truly do live in a very interesting time in terms of change,” he said. “Bermuda is really a case in point of how in a relatively short period of time it has changed its fortunes using insurance as a wheel.”Mr Booth said that the fallout from the financial collapse of 2008 hit all industries, including banking and insurance, hard, with a lot of household names being brought to their knees, and it was still taking time to recover from it and for companies to restore confidence in their shareholders and investors, as well as the general public.“I think it’s fair to say that the man in the street looks at our business with a fair degree of scepticism as well,” he said.“We in the insurance industry have, I believe, a unique lifetime opportunity to ensure the man in the street that our business model works and we can make a confident contribution to the rebuilding (process).”Pointing to the fact that the re/insurers were largely in good shape compared to banks which had to make huge write-downs on investments, with the exception of American International Group, which had to be bailed out by the US government, Mr Booth said that the industry had always come to the aid of victims of world disasters such as the terrorist attacks of 9/11 and Hurricane Andrew in 1992 in paying out on claims.More recently, he said that re/insurance companies had stepped up to the plate once again during the first quarter of 2011 in the wake of the floods in Australia, the first New Zealand earthquake and the earthquake and tsunami in Japan.But Mr Booth added that in many cases such as the Queensland flooding, they required the cooperation of governments and authorities to enable them to gain access to the information needed for their catastrophe models.“A cyclical change in the industry is inevitable,” he said. “Pricing in the industry needs to take into account the risks that we assume.“Ten percent of shareholders’ equity might have been expended in the first quarter of this year and it’s clear to me this soft insurance cycle cannot go on indefinitely.“Perhaps a cyclical change will occur over the next six to 18 months, depending on a number of factors including the high wind season in the US.”Mr Booth said that despite the issues, it was a good time to be in the re/insurance industry, particularly given the opportunities to be capitalised on that lay ahead.Describing Solvency II as “another type of earthquake”, he said that the new regulation, which comes into effect at the start of 2013, was taking up a lot of time and resources and questioned the practicality of it.“I’m not sure why you would want to take a world leading insurance industry [in Europe] and render it less competitive than the US and Asia by introducing a system which is clearly onerous,” he said.Looking at the issue of demographics, Mr Booth said that for the first time ever the industry was seeing a polarisation between young and ageing populations with higher levels of life expectancy and a number of countries and states facing crises with their national pension plans, all of which could be addressed by life insurers.Meanwhile another trend he predicted was a rise in the working population entering the African and Asian markets between 2010 and 2050 with China facing a labour shortage by the middle of the century and Africa as the main source of additional workers, with an opportunity for the first time for some time for Africans to escape poverty.Elsewhere, Mr Booth said the power of social media was on the increase while the risk of reputational damage was more advanced today than any other period in time with re/insurance companies spending more time and energy on online advertising and the distribution of their products becoming more polarised as personal insurance is directly targeted and brokers take a greater part of the commercial side of the business.Turning to climate change, he said that the financial crisis had superseded it on the political agenda in the last few years, but had come to the fore once again as one of the biggest potential opportunities for the industry as a whole over the next century.Among the most pressing concerns, he believes will be rising seas levels and the growth of large cities, both of which re/insurers will need to provide the coverage for.“Going forward, what we are going to need to have is capital strength, diversification, underwriting discipline, customer focus and global positioning,” he said.“It’s (the insurance industry) the oil in the engine of the global economy more so than ever before. I believe that we can take our place even above the banks, and that is a great attribute to have.“We have to be the changing agent and to be part of the solution of the financial crisis.”